The Lancashire County Pension Fund Committee met on Friday 20 March 2026, approving the strategic plan and budget for 2026-29 and 2026-27 respectively, and endorsing the revised Funding Strategy Statement. The committee also noted updates on governance matters, including the fund's compliance with the Pensions Regulator's General Code of Practice, and approved changes to governance arrangements in line with the Fit for the Future programme.

Lancashire County Pension Fund Strategic Plan 2026-29 and Budget 2026/27

The committee approved the draft three-year strategic plan for the Lancashire County Pension Fund (LCPF) for 2026-29 and the operational budget for 2026-27. The strategic plan outlines key activities across four workstreams: Governance and Finance, Investments, Administration and Employer Risk, and Shareholder responsibilities. The 2026-27 budget reflects a 10.8% reduction from the previous year, largely due to lower actuarial work following the valuation and economies of scale from the expansion of Local Pensions Partnership Investments (LPPI).

During the discussion on the budget, Councillor S Roylance raised concerns about the general inflation assumption of 3.2%, questioning its realism in light of the conflict in the Middle East and its impact on fuel prices. Mr Joel Michael Tetlow, Head of Fund, acknowledged that inflation indicators suggested a short-term increase and stated that this would be monitored, with any necessary adjustments reported in the mid-year budget review. However, he did not propose any immediate adjustments to the presented budget.

Review of Funding Strategy Statement

The committee approved the revised Funding Strategy Statement (FSS) for the LCPF. This statement, required under the Local Government Pension Scheme Regulations 2013, sets out the policies and assumptions used by the Fund Actuary to determine how employer pension liabilities will be met. The revised FSS incorporates funding parameters agreed in January 2026, including a funding buffer of 115% and a recovery period of 20 years, which resulted in a provisional average employer contribution rate of 9.1% from April 2026. The rationale for these parameters, which aimed to balance employer affordability with the Fund's fiduciary duty and intergenerational fairness, was discussed.

Lancashire County Pension Fund - Governance Matters

The committee noted updates on governance and risk management for the LCPF. This included confirmation that the fund's financial statements for 2024-25 had been approved by external auditors, and the annual report had been updated accordingly. The committee also approved an updated Breaches Policy, recommended by the Lancashire Local Pension Board, and approved updates to the Fund's risk register.

During the discussion on governance, Councillor S Roylance questioned the general inflation assumption of 3.2% in relation to the Middle East conflict. Mr Joel Michael Tetlow acknowledged the potential for short-term inflation increases and stated that this would be monitored, with any implications reported in the mid-year budget review.

The committee also discussed the impact of the conflict in the Middle East on the economy. Mr Tetlow confirmed that while there was some market volatility, the fund's funding level had remained relatively constant. He noted that Local Pensions Partnership Investments Ltd (LPPI) had increased liquidity to provide flexibility in responding to market changes. The Investment Panel would continue to monitor the situation, and it was reported that the panel would be reviewing the LCPF Investment Strategy Statement, with a report to be presented at the next meeting.

Fit for the Future - Governance Arrangements

The committee approved proposals to enhance the fund's governance arrangements in line with the government's Fit for the Future programme. This included rescinding the decision to establish an Appointments Sub Committee for recruiting a second Independent Investment Adviser, and instead recommending Full Council amend the committee's terms of reference to appoint a single Independent Investment Adviser. Furthermore, the committee approved the recruitment of an Independent Person with a broader remit covering investments, governance, and administration.

Councillor S Roylance inquired about potential recruitment challenges for the Independent Person role, given the broader skillset required. Mr Joel Michael Tetlow acknowledged the question's validity, stating that finding suitable candidates would be difficult but expressed confidence in finding someone with the necessary skills. Fiona Miller noted that while Lancashire was positioning itself well, the relevant bill and regulations were not expected to be in place by the 1st of April.

Pension related training, 2025/26 Training Record and Training Plan 2026/27

The committee noted the training record for 2025/26 and approved the training plan for 2026/27. The training plan aligns with the Fit for the Future programme's enhanced knowledge and understanding requirements for all involved in the pension fund. Fund officers will work with Democratic Services to ensure all attendees at relevant meetings possess the appropriate skills and knowledge for informed decision-making. The Chair encouraged members to complete any outstanding online training modules.

Councillor J Tetlow and Councillor R Walsh were noted as having been unable to attend a conference on 10-11 March 2026. Mr Crute noted an omission regarding attendance at a governance conference in Cardiff in January. There was a discussion regarding the completion of LOLA modules, with a request for members to complete outstanding modules. Councillor D Shaw suggested including individuals who have completed relevant training on lists for deputy roles, particularly given the training requirements for the pension fund.

Lancashire Local Pension Board Workplan 2026/27

The committee noted the proposed work plan for the Lancashire Local Pension Board for 2026/27. The plan, developed in consultation with the Chair of the Board, Ms Fiona Miller, focuses on key areas such as policy review, pensions administration services, and preparations for local government reorganisation.

Responsible Investments Report

The committee noted the quarterly responsible investment update from LPPI for Q4 2025. Key highlights included a significant UK housing acquisition programme, bringing over 5,000 homes under ownership with plans to increase this to 15,000 over ten years. LPPI was also redesignated as a signatory to the UK Stewardship Code.

During the discussion on housing investments, Councillor Matthew Brown raised the issue of social and affordable housing, drawing a comparison with the Co-op Pension Fund's investment in social housing. County Councillor Andy Blake confirmed that LPPI had made a £50 million investment into a social housing fund, although it was not Lancashire-focused. Councillor Lavalette questioned the proportion of houses in Lancashire resulting from the £50 million investment, and County Councillor Andy Blake clarified that the primary objective was risk-adjusted return with UK-wide diversification, though new investments into Lancashire were expected. Ms George added that the fund held 69 units in Lancashire within a national fund and that the chosen manager had expertise in this area. Councillor Rick Edwards expressed concerns about potential housing oversupply and the long-term policy implications.

Pension Administration Performance Update

The committee noted the quarterly performance update from LPPA for Q4 2025. Overall casework performance exceeded the SLA target at 99.1%. However, performance regarding the proportion of members receiving their first pension payment within 30 days of retirement was lower, particularly for those with Additional Voluntary Contributions (AVCs) or where notifications were received late from employers. LPPA is working with employers and AVC providers to improve these figures and is planning to automate active retirement payments.

Ms J Eastham inquired about a significant reduction in deferred benefits casework, and Mr Joel Michael Tetlow explained this was due to the introduction of automation and a specific team focused on pending leave cases. Ms George provided assurance that ongoing conversations were addressing the issue of pending levers to prevent future backlogs.

Date of Next Meeting

The committee was informed that the start time for future meetings would be moved from 10:30 am to 10:00 am, effective from 21 May 2026, following a decision by Full Council. The next meeting is scheduled for 19 June 2026.

Local Pensions Partnership Limited - Shareholder Update and Budget 2026/27

The committee noted the shareholder update from Local Pensions Partnership Limited (LPPL) and approved the LPPL Group Budget for 2026/27, along with the business plans for LPPI and LPPA. These items were discussed in a part of the meeting from which the press and public were excluded.

Investment Performance Update Report and Investment Panel Update

The committee noted the investment performance update report for Q4 2025 and the minutes of the Investment Panel meeting held on 11 December 2025. These items were also discussed in a part of the meeting from which the press and public were excluded.

Independent Investment Advisers - Strategic Objectives Assessment and Contract Extension

The committee noted the outcomes of the assessment of the Independent Investment Advisers' compliance against their strategic objectives. They also approved the extension of the contract for Mr D Crum, Independent Investment Adviser, until 31 May 2027, citing the importance of continuity in providing expert advice. These items were discussed in a part of the meeting from which the press and public were excluded.